Social Security payments have become a new bone of contention within the second Trump Administration. The Social Security Administration was set up to make payments to those in very vulnerable positions, like the elderly, disabled, chronically ill or the orphaned, which means that some of its policies may not make sense in the fiscal realm, but they work to ensure that all beneficiaries receive the money they are entitled to.
This does not seem to be good enough for the president and the new Department of Government Efficiency (DOGE), who are looking for ways to cut costs in this service. After being stopped by a court order from accessing the records of all beneficiaries and taxpayers that contribute to the service, they seem to have come up with another way to make cuts for beneficiaries.
To be fair, this cut will only affect about half a million (456,000 to be precise) Americans of the almost 70 million (again, 68.2 million to be precise) that that receive benefits, but it will still cause upheaval for many, and that is the elimination of paper checks for federal payments.
The impact of the new payment method on Social Security beneficiaries
For most of us this sounds almost unreal, after all, who does not have a bank account in the twenty first century? Especially after COVID when so many banks made it easier to sign up to basic services by upgrading their online platforms and cybersecurity protocols. And who still cashes checks! Most of us would not know where to begin if we were given one nowadays.
But there are still many people that do not have access to a bank account. It might be because of their age, economic circumstances (they do not meet the minimum requirements to open one) or because they live in banking deserts and are just unable to open one. This is why the Social Security Administration continues to provide this service, because it is more important to have benefits delivered and accessible to beneficiaries than it is to save money. After all, checks are not convenient for anyone, so those who choose to have their benefits paid out that way do so for a reason.
However helpful this allowance for those who lack bank access is, on March 25, 2020, the White House announced that President Donald Trump had signed an executive order aimed at updating the government’s payment system by shifting from paper-based transactions to secure electronic payments.
Starting September 30, paper checks will no longer be used for any government payments, including tax refunds, supplier payments, benefits, and transfers between agencies. Instead, all federal departments and agencies will adopt electronic fund transfer (EFT) methods, such as direct deposit, digital wallets, debit or credit card payments, and real-time transfers.
Since the number of affected people is so small and it is likely that most of them are either elderly or have no their options, activists and concerned citizens are worried that this change is coming at the worst possible time. In parallel with the move to digital payments, the Social Security Administration is scaling back access to certain telecommunications services which beneficiaries rely on to navigate the transition. These reductions will create added issues, for the same demographic as the one that is affected by the loss of checks and it will likely put some of them at risk of losing their financial stability, especially if they rely on Social Security payments as their primary source of income.
But since the goal is to combat waste, fraud and abuse in government by “modernizing outdated paper-based payment systems that impose unnecessary costs, delays and security risks”, we will have to wait and see if the payoff is worth the risk for these individuals.